Portfolio allocation under decentralization

Abstract

Decentralization shapes the way policy authority is shared between the national and regional levels and that, I argue, will have consequences for government formation. In particular, I contend that the allocation of portfolios in regional coalition governments will be affected by the degree of decentralization of each policy. To analyze this relationship I exploit the cross-time, cross-regional, and cross-policy variation of the process of competence devolution to the Spanish Autonomous Communities between 1980 and 2010. I find that, as expected, an increase in the competences managed by the region in a given policy jurisdiction makes the related portfolio more attractive to all coalition parties, although the effect seems to be particularly significant in economically strong and fast-track regions.